Mortgage Rates Slightly Up As Feds Begins Their Meeting Today

Mortgage rates today are probably up because oil prices increased significantly. With no financial reporting due today, we are primarily working with White House news, rumors and tweets today. The Federal Open Market Committee begins their two-day meeting. Rates will likely stay in a holding pattern until the Fed concludes their meeting with a written statement tomorrow at 1:00pm.

Where Are Mortgage Rates Going?                     

>>> Rates are moving higher as Feds Meeting Begins

Today we have a very busy day as the Federal Open Market Committee (FOMC) begins their two-day meeting on monetary policy. Tomorrow, the meeting will end with a written statement and a post-meeting press conference with Fed Chair, Jerome Powell. The decision from the Fed that is widely expected (94.4% chance according to the CME Group’s Fed Fund futures) to come down tomorrow at 1:00pm is a quarter-point increase to the nation’s benchmark interest rate–the federal funds rate.

That would bring the target range up to 1.50%-1.75%. With the rate hike a virtual lock, financial market participants are more interested in the lesser-known outcomes, such as how the Fed will adjust their current economic outlook. A big question on investors’ minds is will they forecast more than three rate hikes for the rest of 2018. At this time, it definitely seems like a hard pass.

We were getting some strong inflation readings for a while there in February, but recent inflation reports have tempered those expectations. Now, it is looking like the Fed will stick to their current, cautious approach.  At these sort events, the biggest market reaction occurs when the outcome goes against market expectations. So at this meeting the largest swing would happen if the Fed came out with a very aggressive, thinking about rising rates four times type of message.

It is unlikely, but that would certainly send financial market participants into a tizzy and put some serious upward pressure on mortgage rates.

Rate/Float Recommendation           

>>> Lock now before rates move higher

Mortgage rates are on the rise, even though we are seeing them sideways today.  They will most likely stay at current levels until tomorrow afternoon when the Fed comes out with their updated written statement. After that, we will almost certainly get a rate adjustment, so it’s important to keep an eye on your eye on the market tomorrow.